Australia Markets closed

Hanmi Reports Third Quarter 2019 Results

2019 Third Quarter Highlights:      

  • Net income of $12.4 million, or $0.40 per diluted share, up from $2.7 million, or $0.09 per diluted share for the prior quarter and down from $16.1 million or $0.50 per diluted share from the same quarter a year ago; second quarter net income included a $16.7 million provision for loan and lease losses arising from a $15.7 million specific allowance relating to a $40.7 million loan relationship.
  • Loans and leases receivable stood at $4.57 billion at the end of the third quarter, compared with $4.56 billion at the end of the prior quarter, and $4.58 billion at the end of the third quarter of 2018; average loans and leases for the third quarter increased 2.5% on an annualized basis.
  • Deposits were $4.69 billion at June 30, 2019, down 1.5% from the end of the prior quarter principally due to a decline in higher-costing time deposits; deposits were up 1.6% from $4.61 billion a year ago.
  • Net interest income was $44.1 million, up 2.5% from the previous quarter benefitting from an improved net interest margin and one additional day in the quarter.
  • Net interest margin improved to 3.36% compared with 3.30% for the previous quarter reflecting a four basis point decline in the cost of deposits and an improvement in the yield on interest earning assets.
  • Noninterest income was $6.9 million, down from $7.7 million for the previous quarter; gains on sales of SBA loans were $1.8 million and $1.1 million, respectively; second quarter included gains on sales of securities of $0.6 million, and a gain on the sale of a branch building of $1.2 million.
  • Noninterest expense was $32.6 million compared with $30.1 million for the second quarter reflecting elevated charges arising from the troubled loan relationship, the implementation of the new credit loss accounting standard and legal matters.
  • Loan and lease loss provision of $1.6 million compared with $16.7 million for the second quarter; the ratio of the allowance to loans and leases ended the quarter at 1.11% compared with 1.08% at the end of the previous quarter.
  • Third quarter return on average assets was 0.90% and return on average equity was 8.67%.

LOS ANGELES, Oct. 22, 2019 (GLOBE NEWSWIRE) -- Hanmi Financial Corporation (NASDAQ: HAFC, or “Hanmi”), the parent company of Hanmi Bank (the “Bank”), today reported net income for the 2019 third quarter of $12.4 million, or $0.40 per diluted share, compared with $2.7 million, or $0.09 per diluted share for the 2019 second quarter and $16.1 million, or $0.50 per diluted share for the 2018 third quarter.

Bonnie Lee, President and Chief Executive Officer, said, “Hanmi’s third quarter results reflect the continuation of our strategy to protect net interest margin which has led to moderate growth in loans and leases. Our focus on demand deposits and emphasis on loan and lease yields accretive to our overall portfolio underscore this effort. In addition, SBA loan production was the highest in nearly two years and earnings in the quarter benefitted from rising premiums on the guaranteed portion of the SBA (7a) loans that we sold in the period.  Importantly, net interest margin expanded six basis points in the quarter due to a slight increase in loan yields and lower deposit costs driven by a favorable mix of lower time deposits and growth in non-interest bearing demand deposits.”

Ms. Lee concluded, “Notwithstanding the troubled loan relationship identified in the prior quarter, overall asset quality remains strong. Hanmi continues to maintain disciplined underwriting standards and we remain focused on originating high-quality, well-priced loans and leases.”

Quarterly Highlights
(In thousands, except per share data)

                             
  As of or for the Three Months Ended   Amount Change  
  September 30,   June 30,   March 31,   December 31,   September 30,   Q3-19   Q3-19  
   2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18  
                             
Net income $ 12,376     $ 2,656     $ 14,672     $ 11,385     $ 16,081     $ 9,720     $ (3,705 )  
Net income per diluted common share $ 0.40     $ 0.09     $ 0.48     $ 0.37     $ 0.50     $ 0.31     $ (0.10 )  
                             
Assets $ 5,527,982     $ 5,511,752     $ 5,571,068     $ 5,502,219     $ 5,487,042     $ 16,230     $ 40,940    
Loans and leases receivable $ 4,569,837     $ 4,555,802     $ 4,575,620     $ 4,600,540     $ 4,582,883     $ 14,035     $ (13,046 )  
Deposits $ 4,690,141     $ 4,762,068     $ 4,820,175     $ 4,747,235     $ 4,614,422     $ (71,927 )   $ 75,719    
                             
Return on average assets   0.90 %     0.19 %     1.09 %     0.83 %     1.17 %     0.71       -0.27    
Return on average stockholders' equity   8.67 %     1.87 %     10.62 %     7.92 %     10.91 %     6.80       -2.24    
                             
Net interest margin (1)   3.36 %     3.30 %     3.52 %     3.51 %     3.48 %     0.06       -0.12    
Efficiency ratio (2)   64.04 %     59.44 %     56.83 %     56.40 %     56.28 %     4.60       7.76    
                             
Tangible common equity to tangible assets (3)   10.20 %     10.04 %     9.93 %     9.84 %     10.15 %     0.16       0.05    
Tangible common equity per common share (3) $ 18.05     $ 17.83     $ 17.89     $ 17.47     $ 17.31     $ 0.22     $ 0.74    
                             
                             
(1)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.              
(2)  Noninterest expense divided by net interest income plus noninterest income.                      
(3)  Refer to "Non-GAAP Financial Measures" for further details.                        
                             


Results of Operations
Third quarter 2019 net interest income increased 2.5% to $44.1 million from $43.0 million in the 2019 second quarter, principally due to an increase of $1.1 million in interest and fees on loans and leases as a result of increased balances and one additional day in the period as well as a decrease in interest expense on interest bearing liabilities due to lower time deposit balances.  Third quarter loan prepayment penalties were $0.3 million compared with $0.1 million for the second quarter.

                           
  As of or For the Three Months Ended (in thousands)   Percentage Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
Net Interest Income  2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
                           
Interest and fees on loans and leases(1) $ 57,929     $ 56,872     $ 58,334     $ 57,947     $ 56,361       1.9 %     2.8 %
Interest on securities   3,769       3,770       3,456       3,278       3,238       -0.0 %     16.4 %
Dividends on FHLB stock   286       283       289       555       286       1.1 %     0.0 %
Interest on deposits in other banks   193       557       335       179       151       -65.4 %     27.8 %
Total interest and dividend income $ 62,177     $ 61,482     $ 62,414     $ 61,959     $ 60,036       1.1 %     3.6 %
                           
Interest on deposits   15,995       16,728       15,683       14,139       11,694       -4.4 %     36.8 %
Interest on borrowings   367       -       71       420       1,264       0.0 %     -71.0 %
Interest on subordinated debentures   1,757       1,764       1,772       1,754       1,749       -0.4 %     0.5 %
Total interest expense   18,119       18,492       17,526       16,313       14,707       -2.0 %     23.2 %
Net interest income $ 44,058     $ 42,990     $ 44,888     $ 45,646     $ 45,329       2.5 %     -2.8 %
                           
(1)  Includes loans held for sale.                          
                           

Net interest margin on a tax equivalent basis was 3.36% for the third quarter of 2019 compared with 3.30% for the second quarter of 2019. Net interest margin increased 6 basis points from the prior quarter primarily due to lower cost of deposits and an increase in interest-earning asset yields.

The average earning asset yield (tax equivalent) was 4.74% for the third quarter of 2019 compared with 4.72% for the second quarter of 2019. The two basis point increase was principally due to a higher level of loan and lease balances in average earning assets.

The cost of interest-bearing liabilities was 2.04% for the third quarter of 2019 compared with 2.06% for the second quarter of 2019. The two basis point decrease was primarily due to a 4.6% decrease in average interest-bearing deposits.

                           
  For the Three Months Ended (in thousands)   Percentage Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
Average Earning Assets and Interest-bearing Liabilities  2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Loans and leases receivable (1) $ 4,519,770     $ 4,491,377     $ 4,533,120     $ 4,544,722     $ 4,551,284       0.6 %     -0.7 %
Securities   630,450       629,062       589,547       581,550       589,939       0.2 %     6.9 %
FHLB stock   16,385       16,385       16,385       16,385       16,385       0.0 %     0.0 %
Interest-bearing deposits in other banks   35,140       92,753       53,022       34,301       30,368       -62.1 %     15.7 %
Average interest-earning assets $ 5,201,745     $ 5,229,577     $ 5,192,074     $ 5,176,958     $ 5,187,976       -0.5 %     0.3 %
                           
Demand: interest-bearing $ 82,665     $ 83,932     $ 85,291     $ 89,971     $ 92,090       -1.5 %     -10.2 %
Money market and savings   1,555,639       1,541,976       1,526,710       1,510,428       1,377,739       0.9 %     12.9 %
Time deposits   1,692,419       1,863,685       1,852,562       1,751,429       1,687,827       -9.2 %     0.3 %
Average interest-bearing deposits   3,330,723       3,489,593       3,464,563       3,351,828       3,157,656       -4.6 %     5.5 %
Borrowings   74,239       59       10,611       65,217       240,054       125728.8 %     -69.1 %
Subordinated debentures   118,145       118,007       117,863       117,728       117,584       0.1 %     0.5 %
Average interest-bearing liabilities $ 3,523,107     $ 3,607,659     $ 3,593,037     $ 3,534,773     $ 3,515,294       -2.3 %     0.2 %
                           
(1)  Includes loans held for sale.                          
                           
  For the Three Months Ended   Amount Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
Average Yields and Rates  2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Loans and leases receivable(1)   5.08 %     5.08 %     5.22 %     5.06 %     4.91 %     0.01       0.17  
Securities (2)   2.39 %     2.40 %     2.44 %     2.37 %     2.31 %     -0.01       0.08  
FHLB stock   6.93 %     6.93 %     7.15 %     13.44 %     6.93 %     -0.00       -0.00  
Interest-bearing deposits in other banks   2.18 %     2.41 %     2.56 %     2.07 %     1.97 %     -0.23       0.21  
Interest-earning assets   4.74 %     4.72 %     4.89 %     4.76 %     4.60 %     0.03       0.14  
                           
Interest-bearing deposits   1.91 %     1.92 %     1.84 %     1.67 %     1.47 %     -0.02       0.44  
Borrowings   1.96 %     0.00 %     2.71 %     2.56 %     2.09 %     1.96       -0.13  
Subordinated debentures   5.92 %     5.96 %     6.01 %     5.94 %     5.92 %     -0.04       0.00  
Interest-bearing liabilities   2.04 %     2.06 %     1.98 %     1.83 %     1.66 %     -0.02       0.38  
                           
Net interest margin (taxable equivalent basis)   3.36 %     3.30 %     3.52 %     3.51 %     3.48 %     0.06       -0.12  
                           
Cost of deposits   1.37 %     1.41 %     1.35 %     1.20 %     1.04 %     -0.04       0.33  
                           
(1)  Includes loans held for sale.                          
(2)  Amounts calculated on a fully taxable equivalent basis using the federal tax rate in effect for the periods presented.            
                           

For the third quarter of 2019, the loan and lease loss provision was $1.6 million compared with $16.7 million for the preceding quarter. Net charge-offs were $0.3 million for the 2019 third quarter, compared with $0.2 million for the 2019 second quarter. The allowance to loans and leases increased to 1.11% at the end of the third quarter from 1.08% for the previous quarter.

Third quarter noninterest income decreased 11.2% to $6.9 million from the second quarter, primarily from the $1.2 million gain on sale of a branch building realized last quarter as well as the decrease of $0.6 million in gain on sales of securities from the second quarter sale of the Bank’s remaining portfolio of tax-exempt municipal bonds. These decreases were partially offset by a $0.7 million increase in gain on sale of SBA loans. Gains on sales of SBA loans were $1.8 million for the third quarter, up from $1.1 million for the preceding quarter. The volume of SBA loans sold for the 2019 third quarter and 2019 second quarter were $24.3 million and $15.4 million, respectively.

                           
  For the Three Months Ended (in thousands)   Percentage Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
Noninterest Income  2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Service charges on deposit accounts $ 2,518     $ 2,486     $ 2,358     $ 2,648     $ 2,513       1.3 %     0.2 %
Trade finance and other service charges and fees   1,191       1,204       1,124       1,167       1,128       -1.1 %     5.6 %
Servicing income   614       600       357       630       673       2.3 %     -8.8 %
Bank-owned life insurance income   279       281       280       288       285       -0.7 %     -2.1 %
Gain on sale of bank premises   -       1,235       -       -       -       -100.0 %     0.0 %
All other operating income   491       293       484       584       483       67.6 %     1.7 %
Service charges, fees & other   5,093       6,099       4,603       5,317       5,082       -16.5 %     0.2 %
                           
Gain on sale of SBA loans   1,767       1,060       926       983       1,114       66.7 %     58.6 %
Net gain (loss) on sales of securities   -       570       725       -       19       -100.0 %     -100.0 %
Total noninterest income $ 6,860     $ 7,729     $ 6,254     $ 6,300     $ 6,215       -11.2 %     10.4 %
                           

Noninterest expense for the third quarter increased 8.2% to $32.6 million from $30.1 million for the prior quarter primarily due to a $1.1 million increase in occupancy and equipment expense, a $0.8 million increase in professional fees and a $0.6 million increase in salaries and benefits expense. The increase in salary and benefits expense arose from an increase in incentive expense and personnel. Occupancy and equipment expense was driven by the second quarter reassessment and reduction of personal property tax expense, while the increase in professional fees reflects charges related to the reporting delay for the troubled loan relationship, expenses for CECL implementation and legal fees from the year-ago terminated merger transaction. Primarily as a result of higher noninterest expense, the efficiency ratio increased to 64.0% in the third quarter from 59.4% in the prior quarter.

                             
  For the Three Months Ended (in thousands)   Percentage Change  
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19  
  2019   2019   2019   2018   2018   vs. Q2-19   vs. Q3-18  
Noninterest Expense                            
Salaries and employee benefits $ 17,530     $ 16,881     $ 15,738     $ 15,845     $ 17,436       3.8 %     0.5 %  
Occupancy and equipment   4,528       3,468       4,521       4,105       3,685       30.6 %     22.9 %  
Data processing   2,410       2,140       2,083       1,894       1,745       12.6 %     38.1 %  
Professional fees   2,826       1,983       1,649       1,969       1,626       42.5 %     73.8 %  
Supplies and communication   726       649       844       797       805       11.9 %     -9.8 %  
Advertising and promotion   927       945       760       1,316       814       -1.9 %     13.9 %  
Merger and integration costs   -       -       -       -       466       -       -100.0 %  
Off-balance sheet loss allowance provision (income)   209       233       (339 )     82       -       -10.3 %     0.0 %  
All other operating expenses   3,291       3,687       3,728       3,669       2,872       -10.7 %     14.6 %  
subtotal   32,447       29,986       28,984       29,677       29,449       8.2 %     10.2 %  
                             
Other real estate owned expense (income)   160       158       81       (378 )     (441 )     1.3 %     -136.3 %  
Total noninterest expense $ 32,607     $ 30,144     $ 29,065     $ 29,299     $ 29,008       8.2 %     12.4 %  
                             

Hanmi recorded a provision for income taxes of $4.3 million for the third quarter of 2019, representing an effective tax rate of 25.9% compared with $1.2 million, representing an effective tax rate of 31.5% for the second quarter of 2019. For the first nine months of 2019, the effective tax rate was 28.5%.

Financial Position
Total assets were $5.53 billion at September 30, 2019, a 0.3% increase from $5.51 billion at June 30, 2019.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.57 billion at September 30, 2019, compared with $4.56 billion at June 30, 2019. Hanmi continued to emphasize growth in commercial loans and leases, while allowing residential mortgages to decline through amortization. Loans held for sale, representing the guaranteed portion of SBA loans, were $6.6 million at September 30, 2019 compared with $6.0 million at the end of the second quarter.

Loans and leases receivable, before the allowance for loan and lease losses, were $4.58 billion at September 30, 2018.

                           
                           
  As of (in thousands)   Percentage Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
   2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Loan and Lease Portfolio                          
Commercial real estate loans $ 3,209,752     $ 3,213,135     $ 3,230,526     $ 3,257,792     $ 3,275,382       -0.1 %     -2.0 %
Residential real estate loans   436,576       458,327       483,830       500,563       516,968       -4.7 %     -15.6 %
Commercial and industrial loans   441,210       409,502       422,502       429,903       396,383       7.7 %     11.3 %
Lease receivables   467,777       460,519       425,530       398,858       379,455       1.6 %     23.3 %
Consumer loans   14,522       14,319       13,232       13,424       14,695       1.4 %     -1.2 %
Loans and leases receivable   4,569,837       4,555,802       4,575,620       4,600,540       4,582,883       0.3 %     -0.3 %
Loans held for sale   6,598       6,029       7,140       9,390       4,455       9.4 %     48.1 %
Total loans and leases $ 4,576,435     $ 4,561,831     $ 4,582,760     $ 4,609,930     $ 4,587,338       0.3 %     -0.2 %
                           
                           

For the third quarter of 2019, commercial real estate loans as a percentage of loans and leases receivable decreased to 70.2% compared with 71.5% for the same period last year.

New loan and lease production in the 2019 third quarter was $217.5 million at an average rate of 5.54% while the average rate of the loans that paid off during the period was 5.15%.

  For the Three Months Ended (in thousands)
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,
   2019     2019     2019      2018     2018 
New Loan & Lease Production                  
Commercial real estate loans $ 78,039     $ 105,527     $ 46,531     $ 87,523     $ 112,748  
Commercial and industrial loans   51,093       48,451       33,643       68,113       32,714  
SBA loans   34,114       19,970       29,976       30,758       25,388  
Lease receivable   52,333       77,983       69,577       59,023       64,284  
Consumer loans   1,882       450       122       831       2,873  
  subtotal   217,461       252,381       179,849       246,248       238,007  
                   
                   
Net line utilization   (4,012 )     (52,404 )     19,581       (21,715 )     (21,423 )
Loan purchases   -       -       -       -       2,160  
Payoffs & amortization   (174,045 )     (201,617 )     (207,784 )     (184,891 )     (156,376 )
Loan sales   (24,286 )     (16,650 )     (15,459 )     (18,210 )     (19,751 )
Charge-offs   (916 )     (1,527 )     (1,107 )     (3,775 )     (1,245 )
Other real estate owned   (168 )     -       -       -       (615 )
                   
Loans and leases-beginning balance $ 4,555,803     $ 4,575,620     $ 4,600,540     $ 4,582,883     $ 4,542,126  
Loans and leases-ending balance $ 4,569,837     $ 4,555,803     $ 4,575,620     $ 4,600,540     $ 4,582,883  
                   

Deposits decreased to $4.69 billion at the end of the 2019 third quarter from $4.76 billion at the end of the preceding quarter. The decrease reflects an 11.6% decline in time deposits offset by a 5.8% increase in noninterest-bearing demand deposits. The average loan-to-deposit ratio for the third quarter was 97.6% compared with 94.6% in the second quarter.

Deposits increased 1.6% from $4.61 billion at the end of the third quarter last year, as money market and savings deposits and non interest-bearing demand deposits increased 7.5% and 5.7%, respectively.

                           
  As of (in thousands)   Percentage Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
   2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Deposit Portfolio                          
Demand: noninterest-bearing $ 1,388,121     $ 1,312,577     $ 1,316,114     $ 1,284,530     $ 1,313,777       5.8 %     5.7 %
Demand: interest-bearing   84,155       80,248       85,946       87,582       90,586       4.9 %     -7.1 %
Money market and savings   1,590,037       1,528,000       1,543,299       1,573,622       1,478,631       4.1 %     7.5 %
Time deposits   1,627,828       1,841,243       1,874,816       1,801,501       1,731,428       -11.6 %     -6.0 %
Total deposits $ 4,690,141     $ 4,762,068     $ 4,820,175     $ 4,747,235     $ 4,614,422       -1.5 %     1.6 %
                           
                    -      

At September 30, 2019, stockholders’ equity was $574.5 million, compared with $564.5 million at June 30, 2019. Tangible common stockholders’ equity was $562.6 million, or 10.20% of tangible assets, compared with $552.4 million, or 10.04% of tangible assets at June 30, 2019. Tangible book value per share increased to $18.05 from $17.83 in the second quarter.

Hanmi continues to be well capitalized, with a preliminary Tier 1 risk-based capital ratio of 12.04% and a total risk-based capital ratio of 15.23% at September 30, 2019, versus 11.83% and 14.99%, respectively, at June 30, 2019.  

  As of   Amount Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
   2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Regulatory Capital ratios (1)                          
Hanmi Financial                          
Total risk-based capital   15.23 %     14.99 %     14.17 %     14.54 %     15.01 %     0.24       0.22  
Tier 1 risk-based capital   12.04 %     11.83 %     11.94 %     11.74 %     12.21 %     0.21       -0.17  
Common equity tier 1 capital   11.61 %     11.41 %     11.52 %     11.32 %     11.79 %     0.20       -0.18  
Tier 1 leverage capital ratio   10.44 %     10.20 %     10.39 %     10.18 %     10.53 %     0.24       -0.09  
Hanmi Bank                          
Total risk-based capital   14.81 %     14.62 %     14.37 %     14.19 %     14.76 %     0.19       0.05  
Tier 1 risk-based capital   13.69 %     13.54 %     13.64 %     13.47 %     14.05 %     0.15       -0.36  
Common equity tier 1 capital   13.69 %     13.54 %     13.64 %     13.47 %     14.05 %     0.15       -0.36  
Tier 1 leverage capital ratio   11.90 %     11.67 %     11.88 %     11.67 %     12.11 %     0.23       -0.21  
                           
(1)  Preliminary ratios for September 30, 2019                          
                           

Hanmi declared a cash dividend of $0.24 per common share on its common stock in the 2019 third quarter. The dividend was paid on August 30, 2019, to stockholders of record as of the close of business on August 9, 2019.

Asset Quality
Loans and leases 30 to 89 days past due and still accruing were 0.18% of loans and leases at the end of the third quarter of 2019, compared with 0.25% at the end of the second quarter.

Classified loans were $80.7 million at September 30, 2019 compared with $75.7 million at the end of the second quarter, while special mention loans were $27.4 million at the end of the third quarter compared with $23.8 million at June 30, 2019.

Nonperforming loans and leases were $64.7 million at the end of the third quarter of 2019, or 1.42% of loans and leases compared with $63.0 million for the second quarter, or 1.38% of the portfolio.

Nonperforming assets were $65.1 million at the end of the third quarter of 2019, or 1.18% of assets, compared with $63.5 million, or 1.15% of assets, at the end of the prior quarter.

The troubled loan relationship identified in the 2019 second quarter, included in both the classified and nonaccrual categories, was $40.0 million at September 30, 2019, compared with $40.7 million at June 30, 2019. The decline reflects payments applied to the loans outstanding and the specific allowance remained unchanged at $15.7 million at the end of the third quarter. The $25.0 million commercial loan relationship previously identified in the 2019 first quarter declined to $2.1 million through payments; there were no charge-offs. The balance remaining at the end of the third quarter represents nonaccrual real estate secured loans expected to be paid-off from pending real estate sales.

Gross charge-offs for the third quarter of 2019 were $0.9 million compared with $1.5 million for the preceding quarter. Recoveries of previously charged-off loans and leases for the third quarter of 2019 were $0.6 million compared with $1.3 million for the preceding quarter. As a result, net charge-offs were $0.3 million for the third quarter of 2019, compared with $0.2 million for the second quarter of 2019. For the third and second quarters of 2019, net charge-offs were 0.02% of average loans and leases, respectively.

The allowance for loan and lease losses was $50.7 million as of September 30, 2019, generating an allowance for loan and lease losses to loans and leases of 1.11% compared with 1.08% in the prior quarter.

...
                           
  As of or for the Three Months Ended (in thousands)   Amount Change
  Sep 30,   Jun 30,   Mar 31,   Dec 31,   Sep 30,   Q3-19   Q3-19
   2019     2019     2019     2018     2018    vs. Q2-19   vs. Q3-18
Asset Quality Data and Ratios                          
                           
Delinquent loans and leases:                          
Loans and leases, 30 to 89 days past due and still accruing $ 8,085     $ 11,210     $